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Indian extradited to U.S. on hacking charges

An Indian man has been extradited to the U.S. from Hong Kong on charges of hacking into online brokerage accounts in order to manipulate stock prices. Jaisankar Marimuthu, 34, of Chennai, has entered a not guilty plea in U.S. District Court for the District of Nebraska. He has become the latest entrant in what authorities are describing as an international scheme called 'hack, pump and dump.'

According to Ian McCaleb, a Department of Justice spokesman, another man, Thirugnanam Ramanathan had pleaded guilty to fraud charges and was sentence to two years in jail in September. A third man, Chockalingam Ramanathan, is charged with the same hacking charges, but he is still at large. These three men were charged two years ago for a 2006 scheme in which they allegedly hacked into online brokerages or created new accounts using stolen identities, then bought and sold stocks in order to manipulate prices to their benefit. They had hacked in 60 accounts in nine brokerage firms which included ETrade and TD Ameritrade. One of these firms reported a loss of up to $2 million due to this scam.

The trio drove up prices of low-volume stocks they owned, such as Acordia Therapeutics, Pacel and IGI and then bought shares with hacked accounts then dumped the stocks before the price dropped. In October 2006, they managed to manipulate prices of few Google shares and offered them at $240, which was half its value.

Police is still clueless as to how these three culprits managed to hack into the accounts, but court filings suggest that they may have obtained them from Internet cafes used by American and European visitors in Bangkok. Wireless networks at hotels and Internet cafes can be a security risk, especially if they are unencrypted or use the cracked Wired Equivalent Privacy (WEP) system to secure network traffic.

Source: Silicon India


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